Privatization of government services is nothing but a boondoggle for political cronies.

The City Council is giving the typical reason for
outsourcing control of what amounts to about 11% of the parking spots in
Cincinnati: they say they need the pre-payment of $92 million to close a budget
gap and save 344 jobs.That’s obviously
a load of hooey. What will the city do next time it needs to balance a budget?
Instead of keeping a steady stream of income from a community asset, the City
Council is taking a one-time payment (plus an additional paltry $3 million a
year for 30 years). It’s very short-term thinking.

The Port of Greater Cincinnati Development Authority is
paying the money and will then contract with private operators.The Authority and the private operators would
not be involved if they couldn’t make a profit. Why can’t the city continue to
operate the parking lots and spaces and make the profit itself? It won’t solve
Cincinnati’s fiscal dilemma, but nor will selling off money-making assets.

Cincinnati faces the typical problems of most cities: People
work there, but live and pay most of their taxes to the surrounding suburbs.
Because Cincinnati is the center of the metropolitan area, it has virtually all
of the public institutions such as universities and hospitals, all non-profits
exempt from paying property taxes. In short, the tax base is too narrow and
unfairly made narrower by the unwillingness of suburbanites to contribute to
the municipalities that provide them with jobs, entertainment, tertiary health
care and institutions of higher learning. Fixing the basic tax inequities would
provide a permanent solution. Instead, the City Council wants to give away the
store—probably to political cronies.

The idea of privatizing standard and long-time government
functions such as parking, prisons, highways and schools is nothing more than
an elaborate scheme to transfer wealth from the many to the few.Just consider the money flow and you’ll see
that I’m right:

Instead of the government making the profit, the
owners of the privatized companies do. The few take the profit from the many.

The typical company providing privatized
services is non-unionized with most employees making far less money than the
government workers who previously did the jobs.Executives in government services typically make far less than their
counterparts on the outside. Again, the few take the profit from the many.

One of the most repeated myths in the marketplace of ideas
is that the private sector always does it better than the public sector. All
evidence indicates that it certainly isn’t true when it comes to prisons, the privatization of which has led to many scandals.

If we compare like populations, we see that privatization of
schools hasn’t worked either.Comparing
private schools to public schools proves nothing, since the population of
private schools is so much wealthier and well-connected. We have to compare
public schools to their replacement in public school areas—the charter
school.Virtually all studies show that
the charter school movement has yielded disappointing results in student
performance in school and on standardized tests (which don’t test all skills,
but do test a lot of skills such as reading and math that are needed to get through
life and hold down a job).But
right-wing politicians like charter schools, because charter school teachers
typically don’t have to belong to the union.The teachers make less (and thereby put downward pressure on the pay of
other teachers and job-holders) and the charter school operators make more.

What’s funny is that the way to fix the flaws that critics
find in public institutions such as schools and prisons is more money. More
money for more teachers, better books, labs and computers. More money for more
guards and more education programs for prisoners. But the profit reaped by the owners
of companies that run outsourced government services results in society having less
money to throw at the problems.

What the 20th century should have taught us is that mixed
economies work best. There are lots of societal functions for which private
businesses are in a position to deliver the best mix of price and benefits. But
the services that government has run for ever, or at least since the 18th and
19th centuries, seem to have worked pretty well. At least they did until the
Reaganites and their even more conservative political descendents decided to
starve government by lowering taxes.

If it weren’t for the entertainment value, I’d be pleased that Texas Governor Rick Perry is foundering in the Republican presidential race. After all, Governor Perry, who is in an unprecedented fourth term as chief executive of the nation's second-largest state, still might get the Republican nomination for president. If that happens there’s no telling what the voters might be fooled into doing. Just look at how far George W. Bush got.